RBI’s NBFC Upper Layer List for FY 2024-25

Monisha Chaudhary

23 Apr, 2025

On January 16, 2025, the Reserve Bank of India (RBI) released the list of Non-Banking Financial Companies (NBFCs) granted status under the aegis of the “Upper Layer” (NBFC-UL) for the financial year 2024–25 following the Scale-Based Regulations (SBR) framework. The total number of NBFCs brought under this category is 15, which suggests that these NBFCs are quite prominent in the Indian financial ecosystem with respect to either size, complexity, or systemic significance.

The framework, which came into effect on October 22, 2021, provides an organized manner for undertaking enhanced regulatory supervision. These initiatives form a structured RBI effort to enhance regulatory oversight and promote resiliency in the NBFC space.   

What is the Scale-Based Regulations Framework?

The Scale-Based Regulation (SBR) framework was introduced by the RBI on October 22, 2021, to apply regulation in a proportionate and risk-sensitive manner to NBFCs. It divided NBFCs into four distinct layers depending on their size, activities, and systemic importance.

1. Base Layer (NBFC-BL)

• This constitutes non-deposit-taking NBFCs that have an asset size of less than ₹1000 crore.
• This includes NBFC-Peer-to-Peer (P2P) and NBFC-Account Aggregators.
• Thus, it is considered the least systemic risk and subject to lighter regulation.

2. Middle Layer (NBFC-ML)

• Includes deposit NBFCS irrespective of the asset size.
• It includes non-deposit taking NBFCS with an asset size of at least ₹1000 crores.
• Other such entities include standalone primary dealers and infrastructure debt fund NBFCs, which have also been placed in this layer.
• This group, as opposed to the base layer, is subjected to relatively more stringent regulations on account of relatively higher risk exposure.

3. Upper Layer (NBFC-UL)

• Includes the NBFCs identified by the RBI using a scoring methodology, which would be based on a mix of quantitative and qualitative parameters.
• The entry of the top ten NBFCs by asset size will be automatic.
• These NBFCs are expected to have a systemic impact and are, therefore, subject to enhanced regulatory requirements.

4. Top Layer (NBFC-TL)

• Better be empty; supposed to remain empty.
• Aimed at NBFCs in the upper layer that pose a significant increase in systemic risk.
• Placement into this layer is solely at the discretion of the RBI and is therefore considered only under exceptional circumstances.

The SBR framework has been designed with the following objectives:

• To employ the principle of proportionality in regulation,
• To drive up governance and risk management standards,
• To mitigate systemic risks and contagion in the financial system and
• To reinforce supervisory oversight over larger and more complex NBFCs.

With the rapid growth of the NBFC sector and furthering its interlinkages with the general financial system, the SBR becomes relevant.

List of 15 NBFCs in the Upper Layer (2024–25)

The following companies have been selected for the NBFC-UL category for the 2024–25 cycle:

These entities have been identified either due to their large asset base or due to scoring high on parameters set out by the RBI.

Regulatory Implications for NBFCs in the Upper Layer

The NBFCs in the upper layer have attendant enhanced regulatory requirements. These requirements include, but are not limited to:

• Corporate governance standards are more exacting.
• Higher expectations for risk management and internal control.
• Strict compliance with prudential norms, disclosure norms, and auditing requirements.
• Group structure, related party transactions, and exposure norms are to be monitored.

Importantly, an NBFC that receives Upper Layer designation must abide by these enhanced requirements for a period of five years, even when it fails to meet the selection criteria down the road.

Special Considerations and Clarifications

• Tata Sons Private Limited is included as a Core Investment Company (CIC); however, this is subject to the outcome of its pending de-registration application, which is under examination by the RBI.
• Piramal Enterprises Limited’s exclusion is due to the restructuring of the business group, although it qualifies under the scoring methodology.
• Sammaan Capital Limited, formerly Indiabulls Housing Finance, is included in the list under its new name.

To Wrap Up

The Upper Layer classification for these 15 NBFCs by the RBI signifies its aim to proactively supervise and regulate large NBFCs, which are a potential risk to the financial system. In this manner, the RBI further provides a strong underpinning for the resilience of the financial sector and promotes risk governance among the largest players in the non-banking space.

The SBR framework is reflective of RBI’s supervisory approach, looking ahead, and it serves as a clear message that, along with size and complexity, comes great responsibility and scrutiny.

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